USGC: Upbeat corn outlook prompts focus on market access

As U.S. corn farmers kick their planters into high gear, signals on the ground, in the sky and in the markets look promising for the 2015 crop.

“Overall, I think planting conditions as far as moisture goes are good,” said Alan Tiemann, a Nebraska farmer and U.S. Grains Council vice chairman.

“Planting progress is a little behind, but with the equipment we’ve got these days, we’ll make that up in a heartbeat. If we get about three good days on our farm, we’ll have corn planting wrapped up.”

Planting progress is ahead of schedule in Kansas, Minnesota and the Dakotas, according to the USDA’s April 27 crop progress report, and is only slightly behind the five-year average in Nebraska.

The spring weather outlook is also favorable for the 2015 crop. Most of the U.S. Corn Belt is currently drought-free, with the exception of the Dakotas and some of Nebraska and Kansas. Drought areas in Minnesota and Wisconsin are generally north of the prime corn producing regions.

Another positive signal is the weak El Niño currently in effect. Weak El Niño conditions can result in Midwest crop yields as much as 10 percent above the trend line, according to an Iowa State University study.

Currently, the National Weather Service’s Climate Prediction Center reports a 70 percent chance that El Niño will continue in the Northern Hemisphere through this summer and a greater than 60 percent change it will last through autumn.

USDA’s corn supply and use report projects a 2015 corn crop of 14.2 billion bushels (361 million metric tons), an increase of 387 million bushels (10 million tons) over last year.

Good yields are always welcome, but Tiemann raised concerns about what increased production means for commodity prices. The USDA currently projects a corn price of $3.55 to $3.85 per bushel this year, highlighting the need for demand growth to support strong farm income.

“Another 400 million bushels (10.2 million tons) – it’s a challenge. Our best opportunity for markets is outside our borders, but we’re competing with other exporting countries around the world as they improve their yields and their technologies,” Tiemann said.